Massachusetts remained the national leader in Solar Power Rocks’ annual state ranking for home solar, beating out Rhode Island and New Jersey.
Massachusetts retained the top spot, beating New Jersey and Rhode Island. Massachusetts continued to expand its residential solar market during 2016 by re-committing to net-metering and retaining all of its incentives for new solar customers. The cost of electricity, infrastructure development and an investment return rate of 28.5 percent also buoyed the Bay State to the top of the rankings.
Similarly, New Jersey fared almost as well Massachusetts in every category, yet was edged out of the top spot because it does not have as much financing available to future solar customers.
Based on data from the National Renewable Energy Laboratory and other sources, the report ranked each US state’s residential solar market according to 12 criteria highlighted by solar policy, customer incentives and long and short term customer investment outcomes. It also estimated that the average cost of rooftop solar before incentives will decrease 4 percent from $3.95 per watt in 2016 to $3.78 per watt in 2017.
Rhode Island saw the biggest jump in the rankings, moving up 5 spots in the 2016 rankings and another 12 spots in the 2017 rankings. That’s thanks to a strong return on investment rate of 38.5 percent. The state also plans to expand its renewable portfolio standard. Oregon rounds out the top five with proactive legislation and policy, as well as exemplary tax incentives.
While residential solar power is popular in Arizona and Hawaii, the states didn’t fair that well in the rankings largely because their net-metering policies aren’t keeping up with the demand for more home solar power. In Arizona, many incentives that were offered in years past have expired and net-metering was ended by regulators during 2016. Furthermore, 25 percent of all solar power pumped back into the grid is paid back at an estimated at 20 percent of retail prices.
Because of traditional fossil fuel-based power supplies, lack of solar development and the end of numerous Tennessee Valley Authority incentive programs, 11 states such as Mississippi, Oklahoma and Alabama were given failing solar grades at the bottom of the rankings.
Overall, the residential solar market will slow down over the course of 2017. But community and off-site solar power is predicted to continue growing, according to GTM Research and Solar Energy Industries Association (SEIA). The commercial sector of the solar industry is projected to add 800 megawatts and community solar is predicted to grow fourfold by adding more than 200 megawatts throughout 2017. This slow down in rooftop solar growth over the course of 2017 is the result of “customer fatigue” as well as struggles between utilities, regulators and solar developers to refine net-metering.
Another contributing factor, as is the case in California, is that customers are increasingly more in interested in cash sales and loans. Rather than in lease agreements through third party investors.Tweet